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did not spend any money on advertising from 1985 through 1989,
1991, 1992, and 1996. (The record does not include the
information for 1990.) We understand that many a successful
small business relies on word-of-mouth to increase its patronage
or maintain patronage at a satisfactory level. However, as supra
tables 2 through 6 show, petitioner’s patronage remained at
meager and unprofitable levels throughout the period for which we
have evidence in the record. Petitioner did not advertise or, so
far as we can tell from the record, take any other steps to try
to move his videotape activity into the profit column. Indeed,
petitioner testified that he already had as much work as he could
handle. The only facet of his activities that showed significant
changes are the fairly steady increases in expenses and losses.
Supra table 6.
On the whole, although petitioner’s books and records were
sufficient, the rest of his videotape activity does not appear to
have been carried on in a businesslike manner.
(2) Expertise of Taxpayer or Advisers
Petitioner’s background in electronics and communications is
impressive. Petitioner also has a master’s degree in business.
Petitioner consulted reference books such as The Technique of
Film Editing and The Technique of The Film Cutting Room,
instruction manuals for the video and audio equipment, and
numerous other magazines and publications. Petitioner has had
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